Economy Is The Leading Cause Of Foreclosures And Bankruptcies

Economy Is The Leading Cause Of Foreclosures And Bankruptcies "The news continues to forecast a bleak financial outlook for the United States. As commodity and petroleum prices continue to rise, a large number of financial experts are concerned about inflation. In light of this bleak outlook, experts predict that the number of bankruptcy filings will continue to rise through 2011 and beyond 2012. The federal government just reported that the unemployment rate rose to 9.8 percent, and real estate prices continue to decline. In light of all the bad news, the government continues to deliberate how to save the economy and prevent further foreclosures. As a result of reduced wages and higher living expenses, numerous individuals are forced to consider filing for bankruptcy. As many Option Arm mortgages begin to adjust, a significant number of homeowners will confront the stark reality of being unable to afford their payment. In order to avoid foreclosure, homeowners who are already experiencing financial difficulties will have to consider the possibility of filing for bankruptcy. Some of these homeowners have been negotiating with their lender for a mortgage modification. Due to the high rate of defaults and foreclosures, lenders are generally more willing to deal with debtors today. The disadvantage of mortgage modification is that according to a recent report, only 10% of all requested loan modifications were approved.Since the mortgage crisis began in 2007, a record number of individuals have lost their residences through foreclosure. As a result of this crisis, an unprecedented number of Americans continue to file for bankruptcy. The housing crisis affects numerous individuals directly and indirectly. As a result of the lender's foreclosure, lessees have been compelled to vacate a leased property without notice. Due to the prohibitive costs of relocation, these evicted tenants may suffer significant financial harm. People who are already in a precarious financial situation can be pushed over the brink and into bankruptcy by a minor event. The federal government has stated that it will continue to work to prevent foreclosures, but if the current trend persists, the losses incurred by banks and homeowners could derail the economy.In many circles today, foreclosure has become a pejorative term. The banks already have so many properties on their records that they lack the means to foreclose on additional properties. First, the lender must take possession of the foreclosed property and repair it to make it marketable. In this poor economy, it remains difficult to sell the property. According to statistics, the costs associated with a bank's foreclosure and sale of a property can reach six figures. In light of this, many lending institutions are now willing to negotiate with homeowners who have filed for bankruptcy.Although Chapter 7 bankruptcy was not designed to stop foreclosure, it will temporarily halt the process and sometimes provide enough time to negotiate with the lender in order to retain the home. Chapter 13 bankruptcy, on the other hand, is nearly ideal for stopping the foreclosure and negotiating back payments with the lender. This will enable the debtor to catch up over a period of three to five years and keep their home. In most cases, it is advisable to obtain the counsel of a bankruptcy attorney to evaluate your situation. You won't know if bankruptcy is right for you until you learn more about it.
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